TSMC reports 57% profit surge amid AI boom
TSMC posts strong profit rise, driven by AI growth
Taiwan Semiconductor Manufacturing Corp. (TSMC), the world’s largest chipmaker, has reported a 57% increase in profit for the last quarter, fuelled by the rapid expansion of artificial intelligence (AI) technology.
TSMC’s net profit for the quarter amounted to 374.7 billion new Taiwan dollars ($11.4 billion), surpassing analysts' expectations. In addition to strong quarterly performance, the company reported a substantial 34% year-on-year revenue growth for 2024, reaching 2.9 trillion new Taiwan dollars ($88 billion), reports The Associated Press.
For the fourth quarter, TSMC saw a 38.8% revenue increase, totalling 868.46 billion new Taiwan dollars ($26.4 billion). These gains reflect the heightened demand for advanced chips required for AI and other cutting-edge applications, where TSMC remains a key supplier.
Geopolitical Challenges and Expansion Plans
However, TSMC faces challenges amid escalating U.S.-China trade tensions. This week, the U.S. imposed further restrictions on the export of AI chips, aiming to limit China's access to critical technologies.
While Taiwan, TSMC's home base, is exempt from these export caps, the regulations could impact global demand for TSMC’s chips, as companies in non-allied countries will face restrictions. These tensions highlight the complex geopolitical landscape TSMC operates within.
In response to these challenges, TSMC is expanding its manufacturing footprint. The company has announced plans to build three new factories in the U.S. and two in Japan, where governments are offering billions in subsidies to promote domestic chip production. This expansion signals TSMC’s adaptation to global trade policies and its effort to strengthen its position in the semiconductor supply chain.
Reminder, Volkswagen AG reported a decline in global vehicle deliveries in 2024, primarily due to weak demand for electric vehicles (EVs) and fierce competition in key markets, particularly China.
